Widow & Roth Conversion

[dancingrabbit]

This is my first post but I have learned a lot since lurking on the forum. I would appreciate any input from forum members what would be my best course of action as to amount of Roth conversion in 2025.

My spouse passed away this year and 2025 will be my last year to Roth convert filing joint. Our portfolio is broken down to TIRA(30%), ROTH(4%) with 33/67 stock/bond breakdown and Taxable(66%) mostly equity. The TIRA is all bonds. Ordinary income of $43K SS, $40K dividends of which $29K is qualified, $5K exempt. Last year we converted up to the 22% bracket. Since 2025 will be my last year to file married joint, should I convert up to 24%, pay NIIT plus pay IRMAA at 2nd tier? I plan to appeal IRMAA in 2027, widowhood being a qualifying event. Taxes will be paid from taxable.

I am looking to continue doing Roth conversions in the coming years but more concerned with the amount to convert in 2025.

Any help and guidance will be greatly appreciated as I feel stuck.

Thank you!

 

[HappilyRetired]

I am sorry for your loss. I'm sure there are so many moving parts for you to consider.

Personally, I would convert up to Tier 1 but not over it,(see below) so I would not have to pay IRMAA...
I convert from my T-IRA into my ROTH every year, and try to not go into the next tax bracket.

Best to you in 2026.

2026 IRMAA Income Brackets (based on 2024 MAGI)

Filing Status	Tier 0 (No IRMAA)	Tier 1	Tier 2	Tier 3	Tier 4	Tier 5 (Highest)
Single / Head of Household / Qualifying Widow(er) / Married Filing Separately	≤ $109,000	$109,001 – $137,000	$137,001 – $174,000	$174,001 – $220,000	$220,001 – $499,999	≥ $500,000
Married Filing Jointly	≤ $218,000	$218,001 – $274,000	$274,001 – $348,000	$348,001 – $440,000	$440,001 – $749,999	≥ $750,000

 

[Out-to-Lunch]

Sorry for your loss.

I think we need to know WHY you want to Roth-convert. Is yout tIRA account large enough that the RMDs you will encounter later will push you into a high bracket? 24%? 32%?

I like to sometimes think about this decision in actual dollar terms, rather than percentages. I roughly estimate that going up to the top of the 24% bracket will cost you about $8200. That figure comes from the extra 2% of taxes on the money taxed at the 24% rate (assuming that it would otherwise be taxed at 22%, which may or may not be a good assumption), which totals $3758. Plus the extra IRMAA charges, which I believe will total $2928 for a year. Plus 3.8% of $40k, which is $1520. (Not sure if that is all that will be subject to NIIT.)

So, if it were to cost you $8k, is that worth it to you? To get an extra ~$188k out of tax-deferred?

 

[TheWizard]

Very sorry for your loss.
But it sounds like you're decently knowledgeable about your finances; not all surviving spouses are.

Apparently you're not old enough for RMDs yet.
So in that case, after this year, levelize your AGI with an eye on those IRMAA tiers.
You'll need a spreadsheet to help with projected income.

Depending on your overall situation, once you are age 70.5, you can do QCDs to deserving charities rather than pay even high IRMAA and get into the 32% tax bracket.
That's what I do...

 

[MichaelB]

Since 2025 will be my last year to file married joint, should I convert up to 24%, pay NIIT plus pay IRMAA at 2nd tier? I plan to appeal IRMAA in 2027, widowhood being a qualifying event. Taxes will be paid from taxable.

I would covert as much as possible. Your tax rate is going to jump up next year so you want to take advantage of the MFJ filing status, and you have a good case to avoid the higher IRMAA.

You also don’t have much in the Roth. Over the years, having too much TIRA is one of the biggest complaints forum members have expressed. When RMD time comes it is challenging to try and lower taxable income.

 

[dancingrabbit]

Thank you all for your responses.

The main driver to do an aggressive Roth conversion this year was so I can chop off a bit of the TIRA. Out-to-Lunch you made a good point if $8K is a good trade-in for the $188K out of the TIRA. I think it is but I'm still on the fence whether to do it at top of 24% or mid. I have to run the numbers again.

Based on my estimation, even if I do Roth conversions of say $50K every year for ten years starting 2026 I don't think I will ever go down below 22% tax bracket in any given years and maybe 24% or higher come RMD time. I do plan to make use of the QCD when I become eligible.

My Roth account doesn't have much because most of our working years we were not eligible to contribute.

 

[engineernerd]

Roth conversions are not an exact science, because tax laws and investment yields both change over time. You need a crystal ball to know with certainty how much is best to convert.

Given your qualifying event, I'd expect you'll have success appealing the 2027 IRMAA so that's not a big worry. But it's a judgment call whether to pay NIIT or not. The NIIT threshold for single filers is not reduced by half like the standard deduction and brackets are (it's MAGI of $200k single / $250k mfj) so you'll have a decent chance of avoiding or at least minimizing it in future years.

Your having only 30% of your portfolio in tIRAs, and holding only fixed-income investments in those accounts, puts you in a better RMD position than many others here.

In your shoes I would probably only go up to the NIIT threshold, but I wouldn't label you an idiot for going higher, either. It's nice to have money you can use to meet spending needs without blowing through a tax "cliff" of whatever kind might exist in the future. You probably already have money like that in your taxable accounts (your basis), but you can't use that without also triggering some capital gains.

 

[junkanoo]

This is my first post but I have learned a lot since lurking on the forum. I would appreciate any input from forum members what would be my best course of action as to amount of Roth conversion in 2025.

My spouse passed away this year and 2025 will be my last year to Roth convert filing joint. Our portfolio is broken down to TIRA(30%), ROTH(4%) with 33/67 stock/bond breakdown and Taxable(66%) mostly equity. The TIRA is all bonds. Ordinary income of $43K SS, $40K dividends of which $29K is qualified, $5K exempt. Last year we converted up to the 22% bracket. Since 2025 will be my last year to file married joint, should I convert up to 24%, pay NIIT plus pay IRMAA at 2nd tier? I plan to appeal IRMAA in 2027, widowhood being a qualifying event. Taxes will be paid from taxable.

I am looking to continue doing Roth conversions in the coming years but more concerned with the amount to convert in 2025.

Any help and guidance will be greatly appreciated as I feel stuck.

Thank you!

First, sorry for your loss.

To do the tax math correctly, apologies, but we would need to know whether you are 65 or older at the end of this calendar year (same for the deceased).

Candidly, we need to know your situation better. Knowing the mix is nice, but knowing the current total of your T-IRA is paramount. We need to know whether it's more like a mountain or a molehill. Either way, we don't know who you are, so don't worry.

junkanoo

 

[Koolau]

I'm sorry for your loss, dancingrabbit. Welcome to the Forum. I think you will find it a very welcoming place.

The issues of Roth conversion reminds me of 3 dimensional chess. Having said that, this would be a good year to convert up to some level of taxation and cliffs (like IRMAA/NIIT etc.).

 

[Exchme]

You didn't give us the t-IRA balance which is a crucial piece of the puzzle, but folks are mistaken here, this is the one year that you will not have IRMAA surcharges since you had a life changing event.

So converting to the top of the 24% bracket may be a good idea as avoiding IRMAA is about a 4-4.5% break. To handle IRMAA for 2026, you simply file form SS-44A in 2026, telling them about the LCE and giving them an estimate of your 2026 income. Then in 2027, you do repeat that, still giving them your 2026 income estimate. In 2028, they are back on track using your 2026 income (yes they use 2026 three times, so don't go over an IRMAA tier in 2026). They will eventually get the 2026 tax return from the IRS to check your math and will back charge you if your actual 2026 income was high enough to trigger IRMAA.

 

[dancingrabbit]

You are all giving me a lot helpful ideas to mull over to which I am grateful. To add more to my background, I turned 65 this year and my spouse was 4 years older than me.

The total of our TIRA is a little over $1.7M split between nominal & individual TIPS. I pegged the expected nominal return at 3.8-4% annually. After 2025 conversion my initial thought was convert $50K/year starting 2026 for 10 years to keep at 22% tax bracket and 1st tier of IRMAA, assuming everything goes as planned and barring any tax law changes. It probably won’t move the needle much of the TIRA balance, I don’t know. I need to run some Roth conversion tool analysis.

My goal for the Roth conversion is for legacy. I don’t plan to empty out the TIRA as there are benefits to using the funds for long term care and some QCDs.

 

[Out-to-Lunch]

$1.7M is a pretty big slug. At RMD time (10 years from now), your RMD will be north of $70k (in today's dollars) even without much growth. If filing single, that alone will put you in the 22% bracket.

WIth that information, my guess is that a conversion analysis tool would suggest converting as much as you can this year.

 

[junkanoo]

You are all giving me a lot helpful ideas to mull over to which I am grateful. To add more to my background, I turned 65 this year and my spouse was 4 years older than me.

The total of our TIRA is a little over $1.7M split between nominal & individual TIPS. I pegged the expected nominal return at 3.8-4% annually. After 2025 conversion my initial thought was convert $50K/year starting 2026 for 10 years to keep at 22% tax bracket and 1st tier of IRMAA, assuming everything goes as planned and barring any tax law changes. It probably won’t move the needle much of the TIRA balance, I don’t know. I need to run some Roth conversion tool analysis.

My goal for the Roth conversion is for legacy. I don’t plan to empty out the TIRA as there are benefits to using the funds for long term care and some QCDs.

Understood. Thankfully, you have a significant taxable account, which can be quite helpful from 2026 onward to when you start RMDs.

One possibility is to consider doing significant below-the-line charitable contributions from highly appreciated stocks immediately (i.e, 2025). This will significantly offset the Roth Conversions on your 2025 taxes or allow you to do more (within your given tolerance). While, the floor for charitable giving changes in 2026, it's still not a big deal at your tax level. If you gift more than 30% of your AGI (in highly appreciated stock), a portion of your gift will carry forward to next year (or beyond). Naturally, you would need to model this to see the full benefit.

I don't see the value of doing Roth Conversions as a single. In my view, guessing at the possible marginal tax rate of an heir this far out is a crapshoot not worth considering, let alone whether they might still be employed ... particularly when your tax rate on those conversions will be considerable.

Charitable giving (combined with SALT) can also keep you under the LTCG caps as a single. Unfortunately, without doing the charitable giving, thus itemizing your deduction, I don't see the standard deduction allowing this largely due to your SS income. So, continuing charitable gifting *might* keep you in the 0% LTCG rate. Naturally, I only mention this as you seem willing to consider charitable gifting.

Because your taxable account is significant, you should consider (over the next several years) to create income (to support your expenses) by selling winners offset by selling losers, thus generating income without any tax bill.

I would also suggest changing your Taxable Account to eliminate all bonds and non-qualified dividends. As these are taxed as ordinary income, these are deadly, particularly for someone filing as a single.

Hope that helps.

 

[RetiredHappy]

Charitable giving (combined with SALT) can also keep you under the LTCG caps as a single. Unfortunately, without doing the charitable giving, thus itemizing your deduction, I don't see the standard deduction allowing this largely due to your SS income. So, continuing charitable gifting *might* keep you in the 0% LTCG rate. Naturally, I only mention this as you seem willing to consider charitable gifting.

Single exemption is $48,350 for 0% LTCG, I just cannot see how OP can end up with 0% LTCG, especially since she also wants to do Roth conversion.

 

[junkanoo]

Single exemption is $48,350 for 0% LTCG, I just cannot see how OP can end up with 0% LTCG, especially since she also wants to do Roth conversion.

I didn't mention her doing Roth Conversions as a single, did I?

Nevertheless, I updated my post to make it more apparent.

 

[RetiredHappy]

I didn't mention her doing Roth Conversions as a single, did I?

Nevertheless, I updated my post to make it more apparent.

No you didn't but OP wants to do Roth Conversion, for legacy purposes.

 

[junkanoo]

No you didn't but OP wants to do Roth Conversion, for legacy purposes.

Understood. But, I don't want her to march up that hill. Just because s/he wants to doesn't mean it's the right strategy.

Now, if you think that Roth Conversions make sense for her as a single, please make that case.

 

[RetiredHappy]

Now, if you think that Roth Conversions make sense for her as a single, please make that case.

I can give you an example based on my own situation. If my spouse passes away now, the IRA is even higher than OP's amount. I also have about equal taxable money as his IRA's. I would convert to Roth aggressively every year because ultimately the money goes to the estate. I live in a no state income tax state. My offspring lives in California and the state tax itself will far exceed additional NiTT and IRMAA tiers that I will have to pay. We already pay NITT and IRMAA as it stands. I will pay less taxes by Roth conversion than my offspring, even though he makes very little, about $40K a year or less.

You also stated in your earlier post that OP will start RMD in 2026. It is not true because she only needs to start RMD when she reaches 75, which is 10 years away. It gives her 10 years to do more Roth conversions.

 

[junkanoo]

I can give you an example based on my own situation. If my spouse passes away now, the IRA is even higher than OP's amount. I also have about equal taxable money as his IRA's. I would convert to Roth aggressively every year because ultimately the money goes to the estate. I live in a no state income tax state. My offspring lives in California and the state tax itself will far exceed additional NiTT and IRMAA tiers that I will have to pay. We already pay NITT and IRMAA as it stands. I will pay less taxes by Roth conversion than my offspring, even though he makes very little, about $40K a year or less.

You also stated in your earlier post that OP will start RMD in 2026. It is not true because she only needs to start RMD when she reaches 75, which is 10 years away. It gives her 10 years to do more Roth conversions.

No I didn't. What I wrote was "Thankfully, you have a significant taxable account, which can be quite helpful from 2026 onward to when you start RMDs." You just misread it.

You seem to be making the case that your offspring should consider moving to a state with no taxes. I won't argue the point.

 

[SevenUp]

Condolences to you and your family.

Using the income in the OP with the case study spreadsheet, converting ~$10K this year at 0% federal tax is "obviously a good idea". Then an additional ~$61.5K costs just over 12%, so that's "probably a good idea."

After that you get into "maybe, maybe not" territory, because you skip paying 22% on any conversion amount and go straight from 12% to 27% and bounce around between 25% and 30% after that.

That doesn't look promising, but...:

If your income next year will be about the same (don't know whether your SS income will change), any Roth conversion starts getting taxed at 18.5%, after ~$6K you will pay ~50%, and thanks to IRMAA, etc., you may not drop below 30% after that.

Can you use Excel so you can replicate these numbers yourself, using the tool linked above?

 

[ncbill]

You are all giving me a lot helpful ideas to mull over to which I am grateful. To add more to my background, I turned 65 this year and my spouse was 4 years older than me.

The total of our TIRA is a little over $1.7M split between nominal & individual TIPS. I pegged the expected nominal return at 3.8-4% annually. After 2025 conversion my initial thought was convert $50K/year starting 2026 for 10 years to keep at 22% tax bracket and 1st tier of IRMAA, assuming everything goes as planned and barring any tax law changes. It probably won’t move the needle much of the TIRA balance, I don’t know. I need to run some Roth conversion tool analysis.

My goal for the Roth conversion is for legacy. I don’t plan to empty out the TIRA as there are benefits to using the funds for long term care and some QCDs.

Yep, for legacy I'd do the above as well.

Our Roth accounts are also for our heirs.

I regret not converting mom's small traditional IRA while she was alive since after I inherited it the growth (and RMDs) impacts our ability to stay in the 12% bracket while converting our tIRAs.

 

[Koolau]

I can give you an example based on my own situation. If my spouse passes away now, the IRA is even higher than OP's amount. I also have about equal taxable money as his IRA's. I would convert to Roth aggressively every year because ultimately the money goes to the estate. I live in a no state income tax state. My offspring lives in California and the state tax itself will far exceed additional NiTT and IRMAA tiers that I will have to pay. We already pay NITT and IRMAA as it stands. I will pay less taxes by Roth conversion than my offspring, even though he makes very little, about $40K a year or less.

You also stated in your earlier post that OP will start RMD in 2026. It is not true because she only needs to start RMD when she reaches 75, which is 10 years away. It gives her 10 years to do more Roth conversions.

Yeah, you make a good point to include the state tax issues. They can add a very significant tax burden. I'm sure some of us wouldn't think ahead to the next generation.

You make a good case that, thinking generationally, the tax advantages are there for conversion - even though they might not be when thinking only of your own situation. That's why I have come to think of conversion as multi dimensional chess.

 

[dancingrabbit]

I went ahead and subscribed to Boldin and ran different scenarios on Roth conversion. My take away is to take it year by year especially since I will be filing single in 2026. I realized Roth conversion is so subjective and has so many moving parts. If the goal of my conversion is for legacy then I might just have to bite the bullet and prepay the taxes even if it’s not optimal. I’m still on the fence but I can evaluate one year at a time.

I think I have narrowed down my 2025 Roth conversion, thank you forum members for your guidance. I might try Pralana, too, but the tool seems to have a lot of learning curve. I’ll see.

 

[Coaster4Now]

So sorry for your loss, but you are really on top of it more than I was.
And your IRA % is much less than our part of the portfolio. But it does depend on the actual dollars in TIRA and what bracket it could push you into.
It also depends on the income from your taxable accounts - do they through off significant income that you need.
Apologize if I missed the actual dollars in the posts.

In retrospect, I should have converted much more the first year of my spouse passing, but I didn't have a handle on the amount. So I basically gave up low tax rate room.

Now, I just convert just before the IRMAA limit. Yep, about a third of income at 22%.
But in projections, I'll be in a much higher tax bracket without them.

It's almost 8 years out, since losing partner, and I'm making a dent in when the RMDs push me into IRMAA and NIIT. Seeing progress...

It is a difficult time, losing your partner, and dealing with such things - but you are really doing well considering these issues, while being able to file MFJ.

Best to you!
EDIT:
Apologize - yes just read, your TIRA balance is high. Higher than mine, but mine would be there without conversions. I whittle it down a little at a time.

 

[GravitySucks]

Condolences on your loss.

Will you be able to use Married File Joint rates and deductions in 2026 as a Qualifying Surviving Spouse? May help in your conversions.